Uk Brewing Industry

U.K. brewing industry

The U.K. brewing industry is one of the largest industries in the world. Beer considered as

the British traditional drink with an overall market value of 53 billion. The industry has

developed rapidly in the last 100 years, and the modern market was massively changed

through the last 10 years. The market is controlled by few large firms which control all the

decisions regarding this market. But the main question is if the U.K. brewing market reflects

the theory of oligopolistic market.

Lager caters control the market with over 70% of the total share, and it is produced by four

major companies which represent the concentration ratio of this market. Scottish and

Newcastle is the largest with an overall 27% of the market, second comes Coors which is U.S

owned with 21%, third is INBEV with 16.9% and last but not least is Carlsberg and a total of

14% of the market as it is shown in chart 1.

In the last ten years the U.K. brewing industry has changed dramatically, the year 2000

witnessed the takeover of Bass and Whitbread, two of the industry’s former giants by the

Belgian company INTERBREW. By 2008 INTERBREW merged with INBEV to comprise

16% of the market. By 2003 Coors was second largest brewer of the industry, there it controls

the UK's most popular brew, carling. However, the most important change in the industry was

the dissolution of Scottish and Newcastle in 2008, the 7.8 billion takeover by Heineken and

Carlsberg was approved in March by shareholders, a month later the acquisition was

completed.

As you can see the number of breweries in the market is decreasing as years go by, and the

industry is reflecting more and more characteristics of oligopolistic market as fewer large

firms take control and that will affect the concentration ratio of the market in both long and

short term, but on the other hand new small breweries are being born almost every month, it

is expected that around 15 to 20 new...